Workers’ Comp and the Station Nightclub

December 11th, 2003 by

This is a cautionary tale for America’s small employers.

One hundred people died in the Station Nightclub fire, one of the worst tragedies in American history.

Yesterday, the brothers, Jeffrey A. Derderian and Michael A. Derderian, who owned the Station Nightclub in West Warwick, Rhode Island, and Daniel M. Biechele, the tour manager for the band, Great White, were each charged with 200 counts of involuntary manslaughter, two for each death. Each count carries a possible penalty of up to 30 years in prison.

The Derderians have owned the club since the year 2000. Overwhelmed by the enormity of the catastrophe, lost in the proverbial shuffle, actually, is the fact that in all that time they never purchased a workers’ compensation insurance policy, a statutory requirement.

There were 16 Station Night Club employees working the night of the fire. Four of them died. If there had been workers’ compensation insurance, the families of the dead employees would have been eligible for a meager $5,000 burial benefit. A surviving spouse would have been eligible to receive two-thirds of the deceased’s average weekly wage until death or remarriage.

Absent the insurance, the state stepped in and paid the benefits from a special fund created for such an event and funded by all employers in the state, all employers who purchase workers’ compensation, that is. The state then fined the brothers a little more than $1 million.

Asked why the Derderians never had the insurance, their attorney, Jeff Pine said, “Sometimes these things happen. A lot of businesses and other entities don’t have it.”

I find it interesting that right after the fine was announced, workers’ compensation applications in Rhode Island increased dramatically. Fancy that.

This entry was posted
on Thursday, December 11th, 2003 at 1:49 pm and is filed under State News.
You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.